Allegiance Credit Union Blog

Financial Literacy For Kids Can Be Simple [8 Money Lessons to Share]

Written by Allegiance Credit Union | Sep 30, 2024 1:30:00 PM

Blog Highlights:

  • Teaching kids about money management from a young age is crucial for developing smart financial habits, such as saving, budgeting, and spending wisely.

  • Practical tools and tips enhance children’s learning and simplify hard financial topics.

  • Active participation by parents in discussing financial concepts and managing money helps reinforce lessons and prepares children for responsible financial behavior in adulthood.

  • Parents can benefit from external resources such as free financial coaching and educational materials from organizations like Allegiance, to better support their children's financial literacy journey.


Financial literacy for kids is essential in establishing a foundation for making smart spending, saving, and budgeting habits. Exposing children to financial literacy topics is so important that Oklahoma high schools are now teaching teens how to earn a living, save for retirement, and manage accounts. While we applaud these efforts, parents don’t have to wait that long to introduce their children to these financial concepts. Starting these conversations early will help your child to create lifelong habits that will help them become a financially savvy adult.

What is Financial Literacy for Kids? Does it Matter?

Financial literacy for kids involves sharing important age-appropriate money management skills with your child(ren) that set them up for financial success in the future. When parents and educators don’t discuss financial topics such as savings accounts, investing in interest-bearing share certificates, credit, and borrowing, young adults can be misinformed and make mistakes that impact their financial future for years to come.

By equipping children with money management and long-term planning knowledge, they get a head start on earning revenue by making smart choices. They will be more empowered to manage their household income, and stay out of debt.

8 Mini Money Lessons to Share with Your Child

The value of teaching money lessons provides exponential benefits for those who learn them early. It’s not uncommon for parents and mentors to help minors lay a financial footing that allows them to quickly establish good credit, secure a car loan, recognize scams, and know the difference between a good and poor investment. Explore the mini lessons below and get started having these important conversations.

While some parents have all the answers, some need help themselves. If you are not comfortable having these conversations with your child, or if you are looking for financial tips to help you create a budget, get out of debt, understand your credit report, and more, our free financial coaches and online resources are just a click away. Enjoy free financial management advice for you and your child. 

1. Explain Money’s Value and Purpose

Your children are being incentivized to make purchases regularly. When browsing online devices, they receive a barrage of advertisements to purchase games, novelties, and the trendy supplies they “need” to fit in with society. Purchasing these items is a quick click away. What’s missing from these exchanges is an understanding of the value and purpose of money.

The dollar is not a token or a credit card number designed for whimsical spending. Money is a tool that allows families to purchase necessities such as a reliable automobile, groceries, and sensible clothing. Take time to demonstrate how your family’s income is being put to good use. Show children that priorities such as the mortgage/rent, car loan, food, electricity, and saving for a rainy day come first. Be honest about the cost to run a household and what budgeting tools and tricks you use. Exposing your children now will help them understand what they can expect as they grow older.

2. Introduce Simple Budgeting Skills Using Allowances as Learning Tools

There are simple ways to connect with kids about savvy budgeting. Consider sharing the electrical bill the next time you are asked for a family fun day and discuss how to balance responsibilities with adventure. Talking about “needs versus wants” is a great conversation to have with kids at any age. Also consider implementing an allowance to help your children learn to manage their own money. Purchasing something immediately or waiting until you have saved up over time for something of a greater value is a great lesson to share as well.

3. Open a Kids Savings Account and Encourage Saving for Specific Goals

Opening a kids savings account presents an exciting opportunity to teach financial literacy to kids of all ages. A youth savings account teaches the importance of savings, quarterly interest and growth, goal setting, delayed gratification and understanding the value of money and how it grows over time.

4. Teach the Importance of Giving By Allocating Money for Charitable Donations

Financial prosperity and good works are not mutually exclusive. In fact, money is a wonderful tool to help people who are less fortunate and the community at large. That’s why drawing a connection between earning money and supporting good causes is indispensable. 

The 3-jar system is a widely used approach for teaching kids to manage their allowance while planning for charitable donations. Label three jars as “Save,” “Spend,” and “Share.” Then, as a family, determine what percentage of the allowance should go into each jar.

Let your child decide which charity they would like to donate their funds to. Having them experience the gratitude of their contributions will leave a lasting impression. Not sure where to donate? Consider local examples including the Regional Food Bank of OK, or Boys & Girls Clubs of Oklahoma County, among many others.

5. Teach Needs vs Wants

One of the driving reasons that more than 60 percent of Americans are in credit card debt stems from poor choices. Not only are too many people signing up for high-interest plastic, but they are also giving in to the impulse to buy unnecessary items. According to recent reports, 28 percent believe it will take them five years to pay off their balances.

As parents, mentors, and teachers, having this discussion of needs versus wants early can help bypass some of the trouble many adults are facing today.

6. Encourage Regular Deposits

A foundational element of financial literacy for kids is making regular deposits. Encouraging youngsters to put their money in a kids savings account before impulsively buying something trivial helps develop a fiscally responsible routine. 

At Allegiance, we take great steps to ensure our youngest members have a great experience. When kids join Allegiance and open their Youth Savings Account (for ages 0-13) they become part of the Soaring Eagle Saver Club and receive a free gift with every deposit they make. They get special access to Earnie’s Corner where they can make deposits just like grownups using a special phone to speak with a teller and their own money deposit tube. 

7. Explain Interest

The major difference between a piggy bank and a youth savings account involves interest. Take the time to explain how interest works with your child before opening an account. Explain that once every three months, extra money will be added. And while youth savings typically don't come with high interest rates, it's more about the habit you are instilling. 

8. Encourage Them to Earn Extra Money

Interest payments show youths that money makes money, and that’s a good opportunity to discuss earning extra cash. Even if your child isn’t old enough to work a traditional part-time job, there are plenty of side gigs. Mowing lawns, babysitting, doing household chores for seniors, tutoring, and offering dog-waking services are just a few ways young go-getters can earn extra money and grow their savings.

Allegiance Can Support Your Child’s Financial Literacy Journey

Incorporating financial literacy lessons early in a child's life lays a crucial foundation for their future financial well-being. With Allegiance by your side, you do not have to have these conversations by yourself. We know how important financial literacy is for both children and adults, and that is why we frequently add helpful free blog content, guides and checklists, financial calculators and more to our resource center. 

Need help getting your finances in order or looking for tips to start these conversations from a free financial coach? Explore Money Management and call the financial coaches at BALANCE today. Make sure to tell them you are an Allegiance member so your sessions are free of charge!

Looking for a great first step? Open a Youth Savings Account for your child today and start them on the right financial path. If your child is 14 years or older, they may be eligible for our Teen Checking that comes with a free debit card. If you are curious what documents you will need or how to open one via free Video Banking, explore our FAQ section.

For more financial literacy for kids, download our Swipe Safely: A Teen Debit Card Checklist for Ultimate Success today!